Texas Transmits the Future

Recently the Texas Public Utilities Commission gave initial approval to adding nearly $5B in transmission lines to the state, expected to help bring West Texas wind to the major Texas cities. I asked my friend Vanessa, who has worked in the wind industry for years, if she thought the approved package is a good as it looks. Vanessa was recently quoted in the New York Times article on this issue:

“The lack of transmission has been a fundamental issue in Texas, and it’s becoming more and more of an issue elsewhere,” said Vanessa Kellogg, the Southwest regional development director for Horizon Wind Energy, which operates the Lone Star Wind Farm in West Texas and has more wind generation under development. “This is a great step in the right direction.”

Ms. Kellogg said that the project would be a boon for Texas power customers, whose electricity costs have risen in conjunction with soaring natural gas prices across the state. “There’s nothing volatile about the wind in terms of the price, because it’s free,” she said.

She told me a few more points to keep in mind, listed below, but overall I get the feeling that this package is the sign we all wanted to see that Texas is looking forward. Change is happening, and I hope other states will follow the example set here. Below are a few of the points Vanessa mentioned:

“Important things to note:

S1B was rejected as “fatally flawed.” This was excellent news.

S3 was not rejected, but rather determined not appropriate “at this time,” due to insufficient analysis

Ancillary services study only went to 15,000MW

Cost/Benefit for S3 or S4 was not studied by ERCOT

S2 is a great step in the right direction

It enables investment in the industry to continue

Will allow for large projects to proceed

It is expandable to Scenario 3, per ERCOT’s recommendations.

Other points:

As we push forward in this process, there will be time to study the larger scenarios and perhaps implement Scenario 3 (or something even larger) following the build-out of S2. And as evidenced by the two press conferences representing broad bipartisan support for a “bold” plan, there seems to be the political will to keep going.

The transmission lines will be built to the windiest areas of the state, allowing the best wind resource (thus the cheapest wind) access to market. However, these lines will not be used exclusively by wind generators. ERCOT has an Open Access Transmission Tariff (OATT) that allows any generator to connect to the system. Therefore, these lines will transport not only wind-generated electricity, but likely solar, clean coal, natural gas, and even nuclear generation.

All of this country’s electric transmission infrastructure is outdated. The CREZ upgrades will provide much-needed enhancements to the ERCOT grid to improve performance and enhance grid stability.